The most common editions of the operating system are Windows XP Home Edition, which is targeted at home users, and Windows XP Professional, which has additional features such as support for Windows Server domains and two physical processors, and is targeted at power users and business clients. Windows XP Media Center Edition has additional multimedia features enhancing the ability to record and watch TV shows, view DVD movies, and listen to music. Windows XP Tablet PC Edition is designed to run the ink-aware Tablet PC platform. Two separate 64-bit versions of Windows XP were also released, Windows XP 64-bit Edition for IA-64 (Itanium) processors and Windows XP Professional x64 Edition for x86-64.
Windows XP is known for its improved stability and efficiency over the 9x versions of Microsoft Windows. It presents a significantly redesigned graphical user interface, a change Microsoft promoted as more user-friendly than previous versions of Windows. New software management capabilities were introduced to avoid the "DLL hell" that plagued older consumer-oriented 9x versions of Windows. It is also the first version of Windows to use product activation to combat software piracy, a restriction that did not sit well with some users and privacy advocates. Windows XP has also been criticized by some users for security vulnerabilities, tight integration of applications such as Internet Explorer and Windows Media Player, and for aspects of its default user interface.
Windows XP had been in development since early 1999, when Microsoft started working on Windows Neptune, an operating system intended to be the "Home Edition" equivalent to Windows 2000 Professional. It was eventually merged into the Whistler project, which later became Windows XP.
A feature that Windows XP took over from previous versions Windows 95 and 98 is DirectX; DirectX is a standard of hardware accelerated programming interface (API) which is used to increase performance and introduce rich features like 2 and 3dimensional graphics, real time sound manipulation (such as spacial 3d sound) and new input devices. The 3D API built into DirectX "Direct3D) is a competitor to OpenGL and is being constantly augmented and improved in order to provide rich gaming experiences using features of hardware accelerated graphics cards, which is also a great innovation factor in this sector. Using windows update, new versions of this will continue to be released.
Drivers are little bit of software that enable using system hardware & peripherals (such as Motherboards, Processors, USB devices) and owing to the great usage of Windows XP driver support is second to none; only old hardware (>15 years) can not easily be integrated into the XP environment. A major point of critizism is that certain drivers (e.g. graphics card drivers) run in a mode with elevated rights (kernel mode) which, if buggy, can compromise the stability of the system.
Open Source software can also be integrated into the Windows XP environment, e.g. Firefox / Thunderbird as default web browser / mail client, and the work to do so is relatively little.
Licensing models: Retail vs OEM
OEM Windows is sold as part of specific hardware (e.g. a laptop) tries to integrate application software a lot tighter into the Operating System by preinstalling features like windows desktop search, windows live email, msn browsers etc and also by not providing install disks but so called "rescue disks" that can only restore the custom-built (and highly Microsoft biased) state of a machine. Also these can usually not be used when the PC is upgraded (e.g. new Motherboard).
Retail Windows is sold as a stand alone package and can have Service Packs (SP1, SP2, SP3) already integrated. It usually installs fairly easily on any PC and hardware can be easily added and supported even by the layman.
Windows XP Variants
via Wikipedia (link)